WE THE PEOPLE
SFC has failed to recover cost of timber worth Rs 243 crores from Forest Department so far
Hence people urge concerned Authorities to effect recoveries and press Insurance Companies to settle long pending claims
By: Aleesa Shah
Srinagar: The State Forest Corporation, at the instance of Forest Department, supplies ‘A’ class timber and firewood to the sale depots of the Forest Department for supply to local people at subsidized rates. The Corporation supplied 1.22 crore cfts of timber during 1979-2006, worth Rs. 243.22 crore to the Forest Department, but it has been noticed that no amount had been recovered/claimed by the Corporation for the same. Reasons for not raising any claim were also not found on record. It has further been observed that the Corporation had not reconciled the quality of stock supplied by it with the receipt of the Forest Department. Hence, in the absence of reconciliation of dispatch/receipt figures, pilferage, shortages of timber remaining undetected could not be ruled out.
Moreover, scrutiny of records revealed that the Corporation had been incurring expenditure on payment of labour compensation claims, arising out of death/injury caused to the labourers, engaged by the contractors/amani mates for executing the works. The Corporation had paid Rs. 3.29 crore during 2001-06 on account of such claims, which had not been recovered from the contractor to whom works had been allotted.
It has also been observed that the Management has failed to incorporate a clause in the agreements executed with the contractors for recovery of Labour compensation paid by the Corporation on their behalf. Though the Management decided in October 2003 to incorporate a clause in the tender notices/agreements to be executed with the contractors, making them liable for payment of such claims, no such clause had, however, been incorporated.
Thus, due to non-inclusion of a clause in the agreements/tender notices, the Corporation has burdened its resources for liability, which otherwise was to be discharged by the Contractors.
The stock of the Corporation, scattered at various places is insured against fire risks only. Review of the management of the insurance portfolio revealed that the Corporation had not aggressively followed the cases pending with the Insurance Companies for settlement of claims. Ten cases were pending with the Insurance Companies, where the value of gutted stock aggregated to Rs. 6.24 crore, against which claims for only Rs. 5.34 crore were lodged. The claims were however pending settlement as on September 2007. Despite directions of the COPU to vigorously speed up the action to get the withheld amounts realized from the Insurance Companies and also of the BODs to file suits against defaulting insurance companies, no action had been taken by the Corporation in this regard.
Against the sanctioned strength of 4472 employees, the effective staff strength of the Corporation as on 31 March 2006 was 4077 (91 per cent), which included 150 deputationists from the Forest, Finance and Planning Departments. The percentage of expenditure of establishment vis-à-vis total expenditure ranged between 34 and 59 during the period 2002-2006. The State Government had constituted a Core Group in February 2003 to study the functioning of all the State Public Sector Undertakings and also to identity surplus manpower and possible introduction of Voluntary Retirement Scheme (VRS)/Golden Handshake (GHS). The Core Group identified 2000 employees as surplus in the Corporation in January 2004 and advised it for repatriation of the deputationists and retrenchment of the surplus employees in a phased manner (600-700 employees per year) by adopting VRS/GHS. The BODs had also directed the Management in February 2005 to send erstwhile Government Lumbering Undertaking (GLU) staff back to the Forest Department. It was, however, observed that the Corporation had neither taken any action on the recommendations of the Core Group nor had it repatriated GLU staff to the Forest Department, resulting in payment of idle wages to the surplus staff (which could not be quantified in absence of cadre-wise break-up). On the other hand, the Corporation engaged 12 persons on lump sum monthly salary basis during December 2005 to February 2006.
It is to be kept in mind that ‘Internal Control System’ is an essential pre-requisite for efficient and effective management of an organization. The Company had finalized its accounts up to year 1988-89 and finalization of accounts thereafter was in arrears even in September 2007. This issue was also raised by Audit in the Report of the CAG for the year ending 31 March 2002. No effective steps had, however, been taken by the Management to finalize the pending accounts.
Hence people urge concerned Authorities to effect recoveries and press Insurance Companies to settle long pending claims to safeguard interests of the Corporation without any further loss of time.
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